SEI experienced substantial gains during the recent relief rally and showed signs of a potential upward trend. The primary layer altcoin successfully converted the $0.28 short-term supply zone into a support level, maintaining consolidation below $0.30 for the past two days.
Witnessing a 15% increase earlier in the week, SEI surged from $0.25 to $0.30. The question now remains: Can the bullish momentum be sustained?
Analysing SEI: The Quiet Phase Before Potential Growth?
Throughout Q3, SEI exhibited a consistent price action trend, with each downward movement being reversed at $0.25 in July, August, and September, solidifying it as a crucial support level during the third quarter.
In the prior two rallies from this support level, SEI aimed for $0.35, resulting in a notable 35% increase after surpassing the $0.30 barrier (highlighted in red).
Current market trends bear resemblance to the past two Q2 patterns, as the early-week recovery already delivered a 15% boost to SEI. Nevertheless, as of the latest update, the $0.30 obstacle is yet to be overcome.
Technical indicators on the chart suggest a potential move towards $0.35, with the RSI (Relative Strength Index) indicating room for extension as it stays below overbought levels.
If the Q3 trend continues, prospective SEI investors might consider entry positions upon a breakout retest at $0.30. Initial targets would be set at $0.35 and $0.39.
However, a dip below the Q3 support could negate the optimistic outlook outlined above.
Insights from On-chain and Derivatives Data
Artemis data highlighted a significant rise in daily active addresses within the Sei network since early September.
The metric surged from below 25K to over 55K in recent days, indicating increased network activity that could potentially drive the price recovery.
On a daily basis, SEI saw a 5% increase in value on Friday, accompanied by an 8% rise in open interest rates (OI) and a 41% surge in trading volume across the derivatives market.
These statistics revealed a substantial influx of liquidity into SEI from speculators anticipating further price uptrends. Market sentiment remained predominantly bullish, with long positions dominating at 52%.
Nevertheless, any sudden downturn in Bitcoin’s performance could negatively impact SEI, potentially challenging the bullish narrative.